Alternative fuels pushing up the price of food

WHEN the moral debate raged over contraception a few decades ago proponents of birth control argued it was needed to keep the global population from expanding too fast.

Failure to slow the rate of births would lead to a food crisis, they argued. Not so, said the Catholic Church, which argued there was enough food in the world to feed all.

That may have been true 40 years ago and for those of you who believe Live Aid changed everything, but 30 years on, the level of world hunger is on the rise as food prices go through the roof.

The reason is the massive transfer of grain crops into the production of ethanol as the world misguidedly, some critics argue, diverts grain to ethanol production to tackle the decline in oil and gas.

An estimated 30% of grain in the US will go into ethanol production next year — with huge implications for food.

It also gives the lie to the argument by those involved in this new fuel generation, that the focus on biofuels is not having an impact on world food prices.

The US supplies more than two-thirds of the world’s grain imports so the 15% switch to alternative fuels is bound to impact on the cost of grain, experts have been warning.

In June the US Senate got an earful from Lester Brown, a well-respected economist in the US, from the Earth Policy Institute, which warned: “The stage is now set for direct competition for grain between the 800 million people who own automobiles, and the world’s two billion poorest people.”

Last Monday an article in the Wall Street Journal raised some of the same issues, arguing there were grim times ahead for the least well-off on the planet.

While those in the west are obsessed with the quest to find alternative energy supplies and cheaper food, world aid groups have warned surging costs will undermine their budgets for food aid.

Aid agencies said recently that 200 million malnourished people on the planet rely on their organisations for their daily survival.

But the switch to ethanol is being targeted by these organisations as a big factor in the rising cost of food.

This situation has a plus side also. The rising costs of foodstuffs are also attributable to the increase in the living standards of millions of people. China is now reckoned to have up to 200 million people in a new middle class, all of whom are demanding higher living standards and a better diet.

This year, dairy prices are up by at least 70% as supply fails to meet demand.

Jean Ziegler, the UN special envoy on the right to food, has also voiced serious criticisms of the rush to generate renewable energy from grains.

He accused the US and EU of “total hypocrisy” for promoting ethanol production in order to reduce their dependence on imported oil. He said producing ethanol instead of food would condemn hundreds of thousands of people to death from hunger.

The evidence is also starting to build that the biofuel alternative has not just a cost in terms of food price inflation, but massive implications for the whole world.

Those involved in the biofuel endeavour will argue that this issue is being over hyped, despite a warning from the OECD recently that turning to ethanol as a fuel solution would drive up the cost of food.

The world is between a rock and a hard place. Millions of Chinese and Indians, representing two of the world’s fastest growing economies, want to have a diet that reflects their higher standard of living.

Rising living standards automatically implies a rising demand for fuel.

The move towards a better life for all is starting a chain reaction likely to cause rising global starvation.